New O-Care regs slash fees for some unions

A slate of final Affordable Care Act regulations issued Wednesday would give some labor unions a partial reprieve from fees under the landmark healthcare law.

Revamped standards issued by the Department of Health and Human Services include changes to “reinsurance fees,” designed to tax health plans from 2014-2016 and will be used to help stabilize the individual market as sick patients come on board.


Labor and business groups alike have criticized the fees, uniting behind federal legislation calling for their repeal.

As initially envisioned, the reinsurance fee was to generate about $25 billion in revenue over the three years, beginning this year with a $63 per person charge. The regulations issued Wednesday, however, change the way the fees will be collected and take steps to prevent more than one payment per enrollee.

Importantly, the new rules would “exclude from the obligation to make reinsurance contributions for 2015 and 2016 certain self-insured, self-administered group health plans.”

Many unions have such plans and will not have to pay the reinsurance fees for those years under the new language, though the fees are just one of labor’s gripes about the law.

The Obama administration first signaled the exemption last fall. At the time, business and labor groups said the impact of the measure would have only a limited impact on their members.

The reinsurance fee change is just one of a host of changes to the healthcare law revealed Wednesday by the Obama administration, which also announced a new delay that will allow some consumers to keep health plans that do not meet the law's standards until past the end of the Obama presidency.